California is caught in the crosshairs of an escalating trade war with China
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President Trump paused his sweeping reciprocal tariffs on everyone but China, a country California imported $123 billion in goods from last year.
Why it matters: Trump left a base tax of 10% in place across the world, in addition to duties on some industries, but raised the tariff on China to 125%.
Driving the news: China has issued sanctions against multiple San Diego companies as part of the escalating trade war.
- Kratos Defense, Cubic Corp., Firestorm Labs, Source Intelligence, and Illumina have all been targeted.
- The country added Shield AI, a startup valued last month at $5.3 billion, to its blacklist Wednesday.
- Defense firms with large San Diego footprints Lockheed Martin and General Dynamics were also targeted last year.
Zoom in: In January alone, San Diego County imported $155 million in goods from China, according to the Observatory of Economic Complexity.
The big picture: California is among the states that exports the most to China, too.
- In 2023, the state exported $16 billion in goods to China.
The bottom line: Trump has hinted that more tariffs are coming, but for now he's granted at least a partial, temporary reprieve to dozens of trading partners who were set to absorb the 11-50% taxes he announced last week.
Go deeper: Where U.S. tariffs stand now.